Complex Property Distribution

Complex Property Distribution

What is property distribution?

When a couple goes through a divorce, everything they own must be divided between them. Every item (from furniture to vehicles to property) falls into one of two categories: (1) community property (all property acquired during the marriage) or (2) separate property (all property acquired before the marriage, or after separation, or during the marriage as a separate gift, inheritance, or bequest.). While these definitions may appear simple, the issues related to property division are not. The help of an experience divorce lawyer can make the process of property characterization and distribution easier and faster.

What is Community Property?

In general terms community property is everything that either of the parties earned or acquired during marriage. Unless the parties signed a prenuptial or postnuptial agreement to restrict this basic covenant in family law, or transmuted (transferred) property to become one spouse’s separate property, everything acquired during the marriage is generally presumed to be community property.

Couples are often confused about money they earn while married. In almost all cases, salaries and earnings received by either party during marriage are considered community property. For example, if one spouse purchased a $15,000 car from his or her wages, that car is community property.

What is Separate Property?

In general terms, separate property is everything a spouse owned before marriage, or acquired during the marriage as a gift or inheritance. Rents, profits, or other money one earns from separate property is also separate property. Property bought with separate property is also separate property. All earnings after separation are also considered separate property. If the parties signed a prenuptial agreement, it is more than likely that everything accumulated during the marriage is separate property (depending on the terms of the prenuptial agreement).

What are the most common types of Separate Property?

The list below is not exclusive. Please note that the spouse claiming the property to be his/her separate property has the burden of proof in court if the other spouse disputes the claim.
1. Property owned before marriage.
2. Property that the spouses agree in writing is separate.
3. Gifts received (even from the other spouse) before or during marriage.
4. Property that one party acquires using separate property assets and is clearly kept separate.
5. Personal injury awards – while personal injury awards belong to both spouses during the marriage, when a couple divorces the remainder of the personal injury award belongs to the injured spouse. ?
6. Inheritance received by one party before or during marriage.

If the parties have substantial assets, even if there is no dispute as to what is separate and what is community, it is important that both parties consult with an experienced divorce lawyer.